Kraft Foods Schweiz Holding AG v Darrell Lea Chocolate Shops

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Application by Darrell Lea Chocolate Shops Pty Limited for extension of time in which to serve and file Notice of Opposition to application 771390(30) - the colour Lilac - in the name of Kraft Foods Schweiz Holding AG.

Background

Darrell Lea Chocolate Shops Pty Limited (‘Darrell Lea’) has filed application for extension of time in which to serve and file Notice of Opposition (‘NOO’) to the registration of the trade mark details of which appear below.
Appn No:  771390
Priority Date:               27 August 1998
Owner:  Kraft Foods Schweiz Holding AG (‘Kraft’)
Goods:  Chocolates and chocolate coated products
Trade Mark:                The trade mark consists of the colour LILAC, as shown on sample attached to the application form, as the sole background colour, occupying a clear majority of the packaging used for the goods specified in the application
Endorsement:               Provisions of subsection 41(5) applied.
Acceptance Advert:     14 August 2001: Australian Official Journal of Trade Marks.
Any NOO to the registration of the LILAC trade mark was, in the absence of an approved application for extension of time, due to be served and filed by or on 14 November 2001.
The application was opposed on 13 December 2001 by a third party to these proceedings who had, within the period allowed, sought and received an extension of time in which to do so.
This present application for extension of time was served and filed by Darrell Lea on 21 July 2003, some 19 months after the time allowed for filing a NOO, or an extension of time in which to do so, expired. The application enclosed a Statutory Declaration by Anthony Brooke Watson (‘the Watson declaration’), a partner of Middletons, Lawyers,
On 4 August 2003, a Senior Examiner of the Hearings Section wrote to Middletons advising of her intention to refuse the application for extension of time, giving her reasons and advising Darrell Lea of its right to be heard in the matter. The Senior Examiner also wrote to Freehills Carter Smith Beadle, solicitors for Kraft, enclosing a copy of the letter to Darrell Lea.
On 18 August 2002, Darrell Lea requested to be heard in the matter of the Registrar’s intention to refuse the application for extension of time. Kraft also elected to be represented at the hearing.
As a delegate of the Registrar of Trade Marks, I heard the matter in Melbourne on 19 September 2003. Celia Cumming and Bill Ladas of Freehills Carter Smith Beadle represented Kraft. Dr Sam Ricketson of counsel and Lisa Egan of Middletons represented Darrell Lea.
At the hearing, Dr Ricketson tendered a statutory declaration by Michael Lea, Company Secretary of Darrell Lea, the applicant for the extension if time. Although Ms Cumming objected to the filing of this declaration and I have some reservations about accepting it, I am concerned that I fully canvas the issues in the matter and my acceptance of the declaration into evidence makes no difference to the outcome of these proceedings. The late presentation of the declaration does not therefore deny procedural fairness to Kraft. Indeed, the declaration of Mr Lea shows, if anything, a sharper picture as to why the application for extension should not be granted.
The Watson Declaration
The Watson declaration shows that Darrell Lea was served with proceedings issued by Cadbury –Schweppes Pty Ltd in the Federal Court in February 2003 on the basis of Darrell Lea’s use of a colour. In investigating the basis for this claim, Darrell Lea became aware of application 771390, which it now wishes to oppose. Since becoming aware of the application, Darrell Lea filed a Freedom of Information (‘FOI’) request with the office.
Mr Watson states that at 14 June 2001 (the date that the application was advertised in the Australian Official Journal of Trade Marks as being accepted) Darrell Lea was not aware of the trade mark or of the applicant’s (Kraft’s) intention to apply for the trade mark.
Mr Watson does not state:
·When the FOI request was filed.
·When it was completed.
·Why an FOI at that late juncture was necessary in order that an application for extension of time in which to oppose could be filed.
·Exactly when Darrell Lea or its legal advisors became aware of this application.
The Lea Declaration
Mr Lea states that Deacons of Melbourne, in particular Mr Bill Farrow, has assisted and advised Darrell Lea in respect of its intellectual property work, including trade marks. Mr Lea states that he is aware that another solicitor, a partner in Deacons, “reviews the IP Australia Trade Mark Journal each month” for the purpose of checking whether there are any trade marks advertised for acceptance which may potentially conflict with the interests or [trade] marks owned by her clients. Mr Lea states his reliance on Deacons to advise Darrell Lea if any trade marks are accepted which might affect the interests of Darrell Lea.
Mr Lea does not expressly state:
·When Darrell Lea or its legal advisors became aware of this LILAC application.
·If he is (or was at the relevant time) the person responsible for trade marks within Darrell Lea.
·How long he has been Company Secretary of Darrell Lea.
·Which partner within Deacons has responsibility for Darrell Lea trade marks.
·What specific instructions Darrell Lea gave Deacons.
·Whether Darrell Lea’s intellectual property portfolio was subject to periodical review.
·If any of Darrell Lea’s representatives met with, or received advice from, Deacons at the introduction of the Trade Marks Act 1995 when colours, shapes, sounds, smells, etc became registrable as trade marks.
Neither is it explained why Deacons reviews the Australian Official Journal of Trade Marks on a monthly basis when it is a fortnightly publication. However, this may be an assumption on Mr Lea’s part or pedantry on mine.
Mr Lea confirms that Darrell Lea is subject to an action for passing off and claims under the Trade Practices Act 1974 (Cth) commenced by Cadbury-Schweppes Pty Ltd in the Federal Court and that he “was advised at the time the proceeding was served at the beginning of the year, that Cadbury had applied for the colour purple as a trade mark in respect of chocolate products.”
There follows in the Lea declaration a couple of statements that I find confusing and I reproduce these in full:
I am advised by the Opponent's solicitors that if they had seen a trade mark in the Trade Mark Journal which appeared to be similar to a mark owned by the Opponent and in relation to the same or similar goods and/or services or if they saw any trade mark accepted for registration which they thought might be adverse to the interests of the Opponent, the Opponents solicitors would have written to me to advise me of this fact and to seek instructions as to whether the Opponent wished to oppose such a mark..
I was never informed by the Opponent's solicitors that Kraft (or its predecessors) had applied for the Trade. Mark for the colour 'lilac'. Had I been informed of this fact I would have instructed the Opponents solicitors to file an opposition to the Trade Mark. The Opponent uses a number of different colours in the packaging of its chocolate products, signage and in the fit out of its stores and designated Darrell Lea sites. One colour which has been used over time by the Opponent extensively on packaging for chocolate products and in its stores is "boysenberry" which is a shade which is similar to lilac.
One source of potential confusion in the statement is the fact that Darrell Lea has two firms of solicitors relevant to this matter. The first is Deacons who act in general trade mark and intellectual property matters for Darrell Lea; the second is the firm of Middletons who are the solicitors in the Federal Court matter and represent Darrell Lea in these proceedings. It is not clear to me that Mr Lea’s statements must always necessarily refer to Deacons. I do not regard the statements as being obfuscation – this is merely an observation that is essential in proceedings such as these that declarants for the applicant for extension be utterly lucid and complete in their statements.
Another potential source of confusion is the lack of an affirmation on Mr Lea’s behalf that he is the officer within Darrell Lea who is, or was at the relevant time, responsible for trade mark matters. If he is not, or at that time was not, the lack of any information given to him at that time about this LILAC trade mark may not be surprising.
Another source of confusion is as to what the first quoted paragraph means in the event that it does refer to Deacons. Does it mean that Deacons saw the advertisement and did not think that it was relevant? Does it mean that Darrell Lea was deficient in any instructions that it might have given to Deacons or did not fully inform Deacons as to the nature and scope of its business? Does it mean that for some inexplicable reason Deacons did not see the advertisement? Could it mean that Darrell Lea did not instruct Deacons as to potential common-law trade marks that it uses?
Very obviously, light would be shed on these issues if the declarations in evidence were more precise and there was evidence from Deacons about the nature of their instructions (if any) from Darrell Lea. Evidence from Deacons concerning from whom these instructions originated and the circumstances that gave rise to these proceedings would also be useful – however, this is not before me.
Whatever the actual state of affairs, I am certain that if Deacons had been aware of the significance of the trade mark LILAC, they would have informed Darrell Lea of it. Thus, to all intents, whatever their instructions (if any) were, or what Deacons or their client thought those instructions to be, Deacons was in the same situation as their client seemingly was during the relevant period: they were ignorant of the significance of the advertisement.
Grounds
Although the application seeks the extension of time in terms of reg 5.2(a), (b) and (c), argument as to (a) and (c) were not pursued at the hearing. For completeness, I note now that Darrell Lea has not established those other grounds and I do not grant the extension on those grounds.
Principles
As to reg 5.2(b), I adopt the general principles as set out in British Sky Broadcasting Ltd v SkyNetGlobal Limited [2003] ATMO 17 (11 March 2003) by the Registrar’s Delegate, Mr Williams.
In general, this matter is governed by Part 5 of the Trade Marks Regulations 1995 (the regulations).
Of Part 5 of the regulations, reg 5.1 is relevant but not critical to the present issue, though I will refer to it below. Regs 5.3, 5.4(2) and 5.4(3) are also not critical, as they govern only the form the extension application must take and the entitlement of the objector to make the representations that it has made and to which I will come in due course. I will set out now the remaining parts of regulations 5.2 and 5.4.
Extension of time for filing--grounds
5.2 (1) A person may apply to the Registrar for an extension of time in which to file a notice of opposition.
(2) An application for an extension of time may be made within the period for filing a notice of opposition referred to in regulation 5.1 on 1, or more than 1, of the following grounds and on no other ground:
(a) an error or omission by a trade marks officer;
(b) an error or omission by the person applying for the extension of time, or by the person's agent;
(c) circumstances beyond the control of the person applying for the extension of time;
(d) the conduct of genuine negotiations between that person and the applicant for registration;
(e) the undertaking of genuine research to decide:
(i) whether opposition is justified; or
(ii) on the grounds of opposition.
(3) If the period for filing a notice of opposition has ended, an application for extension of time may be made at any time before the trade mark is registered on 1, or more than 1, of the grounds set out in paragraph (2)(a), (b) or (c) and on no other ground.
I have underlined the subregulations referred to in 5.2(3), above, for convenience of reference.
Extension of time for filing--grant of extension
5.4 (1) Subject to subregulations (2) and (4), if the Registrar is reasonably satisfied as to the grounds set out in an application for an extension of time to file a notice of opposition, the Registrar must grant the extension of time.
...
(4) If an application for extension of time is made after the period for filing a notice of opposition has ended, the Registrar must not grant the extension unless the Registrar is reasonably satisfied that there is sufficient reason for the application not being made before the end of that period.
(5) An extension of time must be for such period:
(a) in the case of an extension of time that is granted on a ground set out in paragraphs 5.2(2)(a), (b) and (c)--as the Registrar believes is reasonable; or
(b) in the case of an extension of time that is granted on a ground set out in paragraphs 5.2(2)(d) and (e)--not exceeding 3 months as the Registrar believes is reasonable.
The time initially provided for any request for an extension of time to oppose registration is the 3-month opposition period specified in reg 5.1. (Chiron Corp v Registrar of Trade Marks (1998) 85 FCR 480, (1998) AIPC 91-439). Darrell Lea was late in filing its request, and missed that deadline. As a late extension request, one made after that deadline, it is subject to the limits imposed by reg 5.2(3).
The thrust of counsel’s submissions can possibly be best summarized as being that there must have been an error or omission on the part of some person or firm or else Darrell Lea would have filed NOO (or an application for extension of time in which to do so) within the requisite time.
However, having considered the extensive list of case-law referred to by both counsel and Ms Cumming, it is apparent that (if extension is to be granted) the person seeking to file NOO, or their legal representative, must have at least been aware of the trade mark within the time allowed in which to oppose it and have been at that time actively attempting to inform itself as to an opposition.
In the words of Hearing Officer Williams in British Sky Broadcasting, above:
I think the necessary causality will have been demonstrated wherever a party has shown an adequate intention to get to an informed position, from which it may decide either to oppose or not to oppose, and where that intention is itself subverted by an error, omission, or circumstance within the scope of reg 5.2(2)(a), (b) or (c).
This general outline of principle must be read in the light of the Hearing Officer’s subsequent qualifying comments which include:
"Intention" figures largely in the headnotes to published decisions, and in decisions of the "we'd have opposed if only we'd known", sort.
In other words, the “adequate intention to get to an informed position, from which it may decide either to oppose or not to oppose,” must be in relation to a specific trade mark which was being actively considered within the relevant period, by the putative opponent, as to possible opposition.
Here, there is no awareness on the part of Darrell Lea or its advisors of a specific trade mark to oppose until February 2003 – some fourteen months after the time in which to file a NOO, or an extension of time, had elapsed. In other words, the matter falls within the unsuccessful "we'd have opposed if only we'd known", type.
Thus, the genus of alleged error or omission that counsel submits that I should infer occurred does not fall within that class of error or omission in respect of which an extension could be granted.
Ultimately, the evidence before me appears to confirm ignorance. It appears unlikely that Deacons received detailed instructions concerning any colours that Darrell Lea are using and these instructions could not in fact have been given because Darrell Lea was seemingly unaware that colours could be registered as trade marks. I am sure that if such instructions were given, they would be in evidence. It is not relevant to these reasons whether Deacons informed Darrell Lea that colours, shapes, smells etc could be registered as trade marks as there is insufficient causal link between that and this issue and, in any event, there is no evidence whether Deacons did so or not.
In the High Court, Isaacs and Gavin Duffy JJ, in Murray v Baxter (1914) 18 CLR 622 at 631, found that a mistake does not include ignorance. They quote with approval these words from Fletcher Moulton LJ and Buckley LJ ex Roles v Pascall & Sons [1911] 1 KB 982 at 987: "A mistake exists when a person erroneously thinks that one state of facts exists when, in reality, another state of facts exists". "Mistake", I note, is given by Websters Third New International Dictionary as a synonym for "error".
Both Darrell Lea and Deacons were, as I have previously noted, ignorant of the significance of the advertisement during the time allowed for NOO (or an application for extension of time filed within that time).
Further, the Registrar must not grant this extension of time unless it is reasonable in terms of reg 5.4(1). In other words, not only does the applicant of extension need to satisfy the Registrar that a ground has been established, but the Registrar must need also to be satisfied in an overall sense that it is reasonable to do so. One of the factors involved in the reasonableness of the grant of the application is the length of time involved. It is, I consider, in part a balancing of the gravity of the error or omission against the length of time involved, and possibly the interests of the parties. Here the length of time in total, some nineteen months up till the application for extension of time, should rule out the grant of the extension in the absence of anything but the gravest error or omission had such error or omission existed. Such an extension of time is therefore not completely inconceivable but must be considered to be most unlikely.
Thus, if a ground had been established by Darrell Lea, the elapse of time between 14 November 2001, the final date for filing NOO or application for extension of time in which to do so, and 21 July 2003 (when the application for extension of time was filed) the elapse of time should have in all probability rendered the grant unreasonable.
Further, if error or omission had occurred during the relevant period, it was incumbent on Darrell Lea to seek extension of time in which to file NOO with all possible haste when the error or omission was discovered. The imprecision of the declarations in evidence does not permit divination of exactly when this LILAC application was discovered by Darrell Lea but it is apparent that the process of filing of the application for extension in all likelihood took some four to five months since the discovery. When all of the other circumstances are considered, this length of time might be assessed as being quite unreasonable irrespective of whether an FOI application had been filed.
While an FOI request might be arguably necessary in certain limited circumstances to determine grounds of opposition in respect of which a NOO is to be filed, the NOO which Darrell Lea seeks extension in respect of appears to claim all possible grounds of opposition under the Act. An FOI might be necessary if, for example, a possible ground under section 62 is suspected or apprehended – it is, however, always open to potential opponents to include this ground on the NOO and delete it at a later date. An FOI thus was not necessary to establish the possible grounds of the opposition in this instance.
In other words, if a ground had been established by Darrell Lea, the potential opponent’s apparent delay in filing subsequent to the discovery would also have rendered the grant unreasonable.

Counsel submitted that Kraft’s interests would not be prejudiced if the extension were allowed as its application is opposed by another person. But, that factor, while relevant to the balancing act under the older section 131 of the Trade Marks Act 1955, is not part of the codification under regulation 5. However, I do observe that there is an ever-present possibility in any opposition, for example, that the opposition could be settled. Similarly, arguments that there are benefits in testing the LILAC application’s entitlement to registration are not germane to regulation 5 and would be, in any event, negated in view of section 33(1) of the Act: there is a presumption that the trade mark which Darrell Lea seeks to oppose is registrable.
I will add that I have not been shown that an error or omission occurred during the relevant period and that, moreover, it is not expressly stated by Darrell Lea or its representatives that there was an error or omission, or an express statement about who allegedly occasioned this error or omission. Rather, I am, in effect, asked to infer from vague, most ambiguous and indirect statements that not only must an error or omission have occurred but also to conclude that it must have been on the part of some firm or a person within that firm. However, both declarants are for obvious reasons unwilling to make express statements; and, there are no declarations from the person or firm who I am asked to conclude are concerned. Obviously, any decision which contemplated grant of the extension on the basis of error or omission in the absence of much more extensive, lucid and precise evidence, with suitable supporting material, which preferably included evidence from the person or firm concerned, would be in danger of doing that person and/or firm a grave disservice and be fraught with potential liabilities.
As I indicated at the hearing, it is a voyage on which I would be unwilling to embark in the absence of such evidence.
In summary, I am satisfied that there are no reasonable grounds for grant of the extension and the grant would be unreasonable.
I refuse to grant Darrell Lea’s application for extension of time in which to oppose.
Costs
If it had been Kraft that had requested the hearing in which to oppose the Registrar’s intention to grant extension of time and was successful, it would be entitled to a costs order against Darrell Lea. As it is, the hearing was at Darrell Lea’s behest at which it was unsuccessful but at which Kraft elected to appear. The hearing concerned the Registrar’s intention to refuse the application for extension of time. In these circumstances, I decline to make an order as to costs.
I was asked by counsel at the hearing as to the disposition of the fees paid by Darrell Lea. At the time I advised counsel that it was my understanding that fees in respect of extensions of time were considered by the Office to be fully expended on filing irrespective of whether the application proceeded to grant. I now confirm that advice.
Ian Thompson
Hearing Officer
Trade Marks Hearings
13 October 2003

[2003] ATMO 58

13 October 2003